The transfer and licensing of know-how and intellectual property : understanding the multinational enterprise in the modern world

The International Transfer Of Technology Is One Of The Most Important Features Of The Global Economy. However, The Literature On It Is Sparse. This Book Encapsulates The Author's Contributions To This Field Over The Last Three Decades And Provides Insights Into The Manner, Mechanisms, And Cost Of Technology Transfer Across National Boundaries And The Implications For (the Theory Of) The International Firm. The International Transfer Of Technology Is One Of The Most Important Features Of The Global Economy. However, The Literature On It Is Sparse. This Book Encapsulates The Author's Contributions To This Field Over The Last Three Decades And Provides Insights Into The Manner, Mechanisms, And Cost Of Technology Transfer Across National Boundaries And The Implications For (the Theory Of) The International Firm.--jacket. Technology Transfer By Multinational Firms : The Resource Cost Of Transferring Technological Know-how -- Time-cost Tradeoffs : Elasticity Estimates And Determinants For International Technology Transfer Projects -- The Market For Know-how And The Efficient International Transfer Of Technology -- Technology And Technology Transfer : Mansfieldian Inspirations And Subsequent Developments -- Profiting From Technological Innovation : Implications For Integration, Collaboration, Licensing And Public Policy -- Managing Intellectual Capital : Licensing And Cross-licensing In Semiconductors And Electronics -- Patents, Licensing, And Entrepreneurship : Effectuating Innovation In Multi-invention Contexts -- Royalties, Evolving Patent Rights, And The Value Of Innovation -- Standards Setting And Antitrust -- A Primer On Trademarks And Trademark Valuation -- Firm Organization, Industrial Structure, And Technological Innovation -- Overseas Research And Development By Us-based Firms -- Inter-organizational Requirements Of The Innovation Process -- Strategic Alliances And Industrial Research -- Organizing For Innovation : When Is Virtual Virtuous? -- Mitigating Procurement Hazards In The Context Of Innovation -- Technology Transfer And R & D Activities Of Multinational Firms : Some Theory And Evidence -- The Multinational Enterprise : Market Failure And Market Power Considerations -- Multinational Enterprise, Internal Governance, And Industrial Organization -- Transactions Cost Economics And The Multinational Enterprise : An Assessment -- Dynamic Capabilities And Multinational Enterprise : Penrosean Insights And Omissions. David J. Teece. Includes Bibliographical References (p. 469-470). Contents......Page 6 Introduction......Page 10 Part I: INTERNATIONAL TECHNOLOGY TRANSFER......Page 18 II. TECHNOLOGY TRANSfER AND THE PRODUCTION OF KNOWLEDGE......Page 20 111. THE SAMPLE......Page 21 IV. DEFINITION OF TECHNOLOGY TRANSFER COSTS......Page 23 V. TRANSFER COSTS: DATA AND HYPOTHESES......Page 25 VI. DETERMINANTS OF THE COST OF INTERNATIONAL TECHNOLOGY TRANSFER: TESTS AND RESULTS......Page 29 VII. DIFFERENCES BETWEEN INTERNATIONAL AND DOMESTIC TECHNOLOGY TRANSFER......Page 33 VIII. CONCLUSION......Page 37 REFERENCES......Page 39 2. Foundations of the Time-Cost Tradeoff......Page 40 3. Estimation of the Time-Cost Tradeoff......Page 42 4. Determinants of the Elasticity of Cost with Respect to Time......Page 44 5. Conclusion......Page 46 References......Page 47 3. The Market for Know-How and the Efficient International Transfer of Technology David J. Teece......Page 48 CODIFICATION AND TRANSFER COSTS......Page 49 CHARACTERISTICS OF THE MARKET FOR KNOW-HOW......Page 51 CODES OF CONDUCT AND THE REGULATION OF TECHNQLOGYIMPORTS......Page 55 REGULATION OF TECHNOLOGY EXPORTS......Page 59 CONCLUSION......Page 62 1. Introduction......Page 64 2. Mansfield's vision and early work......Page 65 3. The economics of (international) technology transfer......Page 66 4. Summarizing elements of received wisdom on replication and transfer......Page 67 5. Capturing value from intellectual capital......Page 72 6. Valuation issues: accounting and market metrics......Page 74 7. The multinational firm, internalization, and R&D activity......Page 77 Notes......Page 78 References......Page 79 Part II: LICENSING AND CROSS-LICENSING......Page 82 1. Introduction......Page 84 3. Profiling from innovation: Basic building blocks......Page 85 3.2. The dominant design paradigm......Page 86 3.3. Complementary assets......Page 87 4.2.1. Pre paradigmatic phase......Page 89 4.2.2. Paradigmatic stage......Page 90 5. Channel strategy issues......Page 91 5.1. Contractual modes......Page 92 5.2. Integration modes......Page 94 5.3. Integration versus contract strategies: An analytic summary......Page 95 5.5. The CAT scanner, the IBM Pc. and NutraSweet: insights from the framework......Page 97 6.1. Allocating R&D resources......Page 99 6.3. Regimes of appropriability and industry structure......Page 100 6.5. The importance of manufacturing to international competitiveness......Page 101 6. 7. Implications for the international distribution of the benefits from innovation......Page 102 References......Page 103 6. Managing Intellectual Capital: Licensing and Cross-Licensing in Semiconductors and Electronics Peter C. Grindley and David J. Teece......Page 106 Background-The Formation of RCA......Page 108 AT&T's Cross-Licensing Practices......Page 110 Cross-Licensing in the Computer Industry-IBM......Page 112 Impact of Consent Decrees on Industry Development......Page 113 Licensing Objectives......Page 114 "Proud List" Royalty Valuation Process......Page 116 Strategic Considerations......Page 117 Impact of TI's Licensing Strategy......Page 118 Innovation Strategy......Page 120 Licensing Objectives......Page 121 IP Management......Page 122 Contrasting IP Management Objectives......Page 124 Initial Growth Phase......Page 125 Increased Global Competition......Page 126 Lessons for Innovation Management......Page 127 Policy Issues......Page 129 Conclusion......Page 131 Notes......Page 132 2. Intellectual Property and Entrepreneurship......Page 140 3. The Multi-invention (Systemic Innovation) Context......Page 142 4.1. Proprietary Use (No Licensing)......Page 145 4.2. "Design Freedom" (Defensive) Patent Strategies......Page 146 4.3. Royalty Generation Strategies......Page 147 5. Entrepreneurship and Patent Strategy in Multi-invention Contexts......Page 148 5.1. Integrated Modes......Page 149 CROSS-LICENSING IN ELECTRONICS AND SEMICONDUCTORS......Page 150 AT&T'S CROSS-LICENSING PRACTICES......Page 151 IBM'S CROSS-LICENSING PRACTICES......Page 153 LICENSING PRACTICES AT TEXAS INSTRUMENTS......Page 154 THE FORMATION OF RCA......Page 156 5.2. Nonintegrated Modes......Page 157 SYSTEM ON A CHIP (SOC) AND ARM, LTD.......Page 158 COMPONENTIZATION AT KENTRON TECHNOLOGIES......Page 159 6. Conclusion......Page 160 Notes......Page 161 References......Page 164 1. Introduction: value and the stages of intellectual property (IP)......Page 168 2. Estimating value at different stages......Page 171 3. Quantifying the adjustment......Page 175 4. Implications and conclusions......Page 178 References......Page 179 9. Standards Setting and Antitrust David J. Teece and Edward F. Sherry......Page 182 A. DIFFERENT TYPES OF STANDARDS......Page 183 1. Formal Standards Versus De Facto Standards......Page 186 2. Standards Versus Regulations......Page 187 B. A CASE STUDY: REFORMULATED GASOLINE......Page 189 A. STANDARDS, INTELLECTUAL PROPERTY, AND MARKETS......Page 196 B. STANDARDS SETTING AND DIVERGENT ROLES......Page 198 C. PATENTED STANDARDS AND SOCIAL EFFICIENCY......Page 200 A. THE CHOICE OF STANDARDS: DIVERGENT ROLES AND DIVERGENT BELIEFS......Page 203 B. THE CHOICE OF STANDARDS: Ex ANTE VERSUS Ex POST ASSESSMENT......Page 205 C. STANDARDIZATION, LOCK-IN, AND OPPORTUNISM......Page 207 D. LIMITATIONS OF THE "HOLD-UP" CONCERN......Page 208 E. "MANIPULATION" OF STANDARDS: ACTIVE AND PASSIVE CONDUCT......Page 210 1. Rules Constraining the SSO Itself......Page 211 2. Rules Affecting Participants......Page 212 3. Participation Constraints......Page 213 1. Search......Page 214 2. Disclosure......Page 217 1. The "One Patent, One Standard" Problem......Page 222 2. "Royalty-Free" and "Reasonable Terms"......Page 223 3. "Reasonable Terms": When Announced?......Page 224 4. "Reasonable" Terms: How Determined?......Page 226 5. Antitrust Remedies......Page 228 6. "Non-Discriminatory" Terms......Page 229 D. PENDING PATENT APPLICATIONS......Page 233 1. Non-Disclosure Does Not Equal Lack of Knowledge......Page 235 2. Public Policy Regarding Disclosure of Pending Patent Applications......Page 238 E. THE NEED FOR CLARITY......Page 239 F. SANCTIONS FOR NON-COMPLIANCE......Page 242 1. The Social Costs of Delay......Page 244 2. Consortia, Organizational Structure, and Efficiency......Page 245 C. RESTRICTIONS ON PARTICIPATION......Page 246 D. ADOPTION OF IMPLICATED STANDARDS......Page 250 E. ANTITRUST INTERVENTION AND CLARITY......Page 251 F. PROBLEMS WITH "ONE SIZE FITS ALL" POLICIES......Page 254 CONCLUSION......Page 256 APPENDIX......Page 258 WHAT IS A TRADEMARK?......Page 264 What Constitutes an Acceptable Trademark?......Page 265 A Trademark Is Not the Same as a Trade Name or Brand......Page 266 A Trademark Is Not the Same as Goodwill......Page 267 Why Do We Care about Trademarks and Why Are They Needed?......Page 268 How Does One Obtain a Trademark?......Page 269 How Are Trademarks Protected and How Can They Be Damaged?......Page 270 Trademarks and the Internet......Page 271 Principles of Licensing......Page 272 Market Approach......Page 274 CONCLUSION......Page 276 NOTES......Page 277 REFERENCES......Page 278 Part III: ORGANIZING RESEARCH AND DEVELOPMENT......Page 280 1. Introduction......Page 282 2.1. Uncertainty......Page 283 2.3. Cumulative nature......Page 284 2.7. lnappropriability......Page 285 3.1. Monopoly power......Page 286 3.2.1. Bureaucratic decision making.......Page 289 3.2.3. Principal-agent distortions.......Page 291 3.3. Scope......Page 292 3.4. Vertical integration......Page 293 3.5. Organizational culture and values......Page 294 3.7. Assessment......Page 296 4. Distinctive governance modes (Archetypes)......Page 297 4.1. The individual inventor and the stand-alone laboratory......Page 299 4.2. Multiproduct. integrated, hierarchical firms......Page 300 4.3. High flex "Silicon Valley" -type firms......Page 301 4.4. Virtual corporations......Page 303 4.5. Conglomerates......Page 304 5. Matching innovation and organizational archetypes43......Page 305 5.1. Autonomous innovation......Page 306 5.2. Systemic innovations......Page 308 6. Conclusions......Page 310 References......Page 311 1. OVERSEAS RAND D EXPENDITURES: 1960-1980......Page 314 II. FACTORS INFLUENCING THE PERCENTAGE OF A FIRM's RAND 0 EXPENDITURES CARRIED OUT OVERSEAS......Page 315 III. OVERSEAS RAND D: MINIMUM ECONOMIC SCALE AND RELATIVE COST......Page 317 IV. OVERSEAS RAND D: NATURE OF WORK AND RELATION TO DOMESTIC RANDD......Page 319 V. CONCLUSIONS......Page 320 NOTES......Page 321 REFERENCES......Page 323 The 'Serial' Model......Page 324 Parallel (Simultaneous) Model......Page 325 Vertical Linkages......Page 327 Horizontal Linkages......Page 328 ORGANIZATIONAL IMPLICATIONS: CO-OPERATION VERSUS INTEGRATION......Page 329 REFERENCES......Page 330 14. Strategic Alliances and Industrial Research David C. Mowery and David J. Teece......Page 332 EXTERNAL SOURCING OF R&D......Page 334 International Strategic Alliances......Page 336 Precommercial Research Consortia......Page 340 University-Industry Research Collaboration......Page 341 CONCLUSION......Page 343 Notes......Page 345 References......Page 347 Outsourcing may make you more flexible. But it could also undermine your ability to innovate.......Page 352 What gives the virtual company its advantage? In essence, incentives and responsiveness.......Page 353 The Case of Industry Standards......Page 354 The very reliance oj virtual companies on partners, suppliers, and other outside companies exposes them to strategic hazards.......Page 355 Matching Organization to Innovation......Page 356 The popularity oj networked companies and decentralization arises, in partJrom observations over a time horizon that isfar too short.......Page 358 16. Mitigating Procurement Hazards in the Context of Innovation John M. de Figueiredo and David J. Teece......Page 360 1. Introduction......Page 361 2. Background......Page 362 Theoretical Antecedents......Page 365 Relevance for Strategic Management......Page 367 Out-Sourcing and Competitive Advantage: Key Components and Pacing Technology at the Frontier5......Page 368 Technological Control at or Behind the Frontier......Page 371 Guarding Technological Capabilities......Page 372 Constellations of Safeguards......Page 373 Vertical Integration, Divestiture and Credible Commitments......Page 377 Acknowledgements......Page 380 References......Page 381 Part IV: THE MULTINATIONAL ENTERPRISE......Page 384 I. INTRODUCTION......Page 386 II. A THEORY OF MULTINATIONAL ENTERPRISE......Page 387 III. THE R&D AND TECHNOLOGY TRANSFER ACTIVITIES OF MULTINATIONAL FIRMS......Page 401 IV. MNEs AND ECONOMIC DEVELOPMENT: ISSUES RELATING TO THE CHOICE OF TECHNIQUE......Page 405 V. CONCLUSION......Page 417 NOTES......Page 418 REFERENCES......Page 419 Relative Efficiency Properties of Markets and Hierarchies......Page 422 Intermediate Product Markets and Vertical Direct Foreign Invesbnent......Page 423 Potential Anticompetitive Consequences of Multinational Enterprise......Page 429 Conclusion......Page 433 References......Page 434 19. Multinational Enterprise, Internal Governance, and Industrial Organization David J. Teece......Page 438 I. Monopoly vs. Efficiency Interpretations of the Multinational Enterprise......Page 440 II. Host-Country Controls......Page 441 REFERENCES......Page 442 1. Introduction and background......Page 444 2. A transactions cost perspective of the multinational enterprise......Page 446 3. International production and multinational enterprise......Page 448 4.1. The transactions cost properties of the horizontally integrated multinational enterprise......Page 451 4.2. The transactions cost properties of vertically integrated multinational enterprises......Page 454 4.3. Evidence......Page 457 4.4. Dynamic considerations......Page 459 4.5. Implications for export competitiveness......Page 460 5. Transactions cost analysis of multinational enterprise-host country relations......Page 461 References......Page 466 Authors......Page 470 The Resource Based Theory of the Firm......Page 471 Penrose and the Theory of Dynamic Capabilities......Page 473 Other Growth Issues and the Penrose Effect......Page 475 Entrepreneurship, Enterprise Design, and the Role of Markets......Page 476 Dynamic Capabilities, Resources and Competitive Advantage: Implications for MNEs......Page 479 Acknowledgements......Page 483 Endnotes......Page 484 References......Page 486 Pt. I. Information transfer. 1. Technology transfer by multinational firms: the resource cost of transferring technological know-how / David J. Teece. 2. Time-cost tradeoffs: elasticity estimates and determinants for international technology transfer projects / David J. Teece. 3. The market for know-how and the efficient international transfer of technology / David J. Teece. 4. Technology and technology transfer: Mansfieldian inspirations and subsequent developments / David J. Teece -- pt. II. Licensing and cross-licensing. 5. Profiting from technological innovation: implications for integration, collaboration, licensing and public policy / David J. Teece. 6. Managing intellectual capital: licensing and cross-licensing in semiconductors and electronics / Peter C. Grindley and David J. Teece. 7. Patents, licensing, and entrepreneurship: effectuating innovation in multi-invention contexts / Deepak Somaya and David J. Teece. 8. Royalties, evolving patent rights, and the value of innovation / Edward F. Sherry and David J. Teece. 9. Standards setting and antitrust / David J. Teece and Edward F. Sherry. 10. A primer on trademarks and trademark valuation / Michaelyn Corbett, Mohan Rao and David J. Teece -- pt. III. Organizing research and development. 11. Firm organization, industrial structure, and technological innovation / David J. Teece. 12. Overseas research and development by US-based firms / Edwin Mansfield, David J. Teece and Anthony Romeo. 13. Inter-organizational requirements of the innovation process / David J. Teece. 14. Strategic alliances and industrial research / David C. Mowery and David J. Teece. 15. Organizing for innovation: when is virtual virtuous? / Henry W. Chesbrough and David J. Teece. 16. Mitigating procurement hazards in the context of innovation / John M. de Figueiredo and David J. Teece -- pt. IV. The multinational enterprise. 17. Technology transfer and R & D activities of multinational firms: some theory and evidence / David J. Teece. 18. The multinational enterprise: market failure and market power considerations / David J. Teece. 19. Multinational enterprise, internal governance, and industrial organization / David J. Teece. 20. Transactions cost economics and the multinational enterprise: an assessment / David J. Teece. 21. Dynamic capabilities and multinational enterprise: Penrosean insights and omissions / Mie Augier and David J. Teece